Back to Blog

Taking the Boring Out of Budget: Insights on How the Federal Budget Affects You

May 23, 2024

Today, I'm on a mission to give you some insights into how the federal budget is impacting your life. While I might not be able to make budget discussions thrilling, I aim to provide you with valuable information that can save you money and benefit your life and your business. Over the past few months, the news has been dominated by topics like the cost of living, recession fears, domestic violence, and high interest rates. There's a lot of tension in our society right now, and many of us are feeling the financial squeeze.

As a nation, we're struggling with money, businesses, and relationships. And let's be honest, I don't expect the government to solve all these issues with the budget. But, if you're like me, a little relief would be nice. As a business owner, it would be great to see some support. Here’s a breakdown of what’s in the budget that might actually help.


Stage 3 Tax Cuts: A Little Extra in Your Pocket

Starting July 1st, the Stage 3 tax cuts will take effect. These cuts are a legacy from the previous administration and have remained in place, which is good news. If you're earning between $45,000 and $200,000, your marginal tax rate will drop to a flatter rate of 30%. This change means more money in your pay. For example, if you're earning $45,000, you could see an extra $16.50 per week. If you're earning $200,000, you might get an extra $174 per week. This brings some relief and simplifies our complex tax system.


Energy Bill Relief Fund: A Helping Hand with Electricity Bills

The Energy Bill Relief Fund offers a $300 rebate for eligible households. If you pay your own electricity bills and don’t share them with other households, you might qualify for this relief. Some states also offer additional rebates. However, you likely need to opt-in to receive these benefits. So, take a moment to sign up and save around $75 per bill.


HECS and HELP Debt: Reducing the Financial Burden

The 7.1% indexation of HECS and HELP debts last year caused significant financial strain however, there's some good news. The increase has been reduced to 3.2% following public outcry. This adjustment will lower your overall debt and the indexation amount. For those who paid off their debts early to avoid higher indexation, there might be a refund coming your way.

If you have a HELP debt, you start repaying it when your income exceeds $51,550 this year, with the threshold rising to $54,435 next year. The repayment rate increases with your income, significantly impacting your cash flow. Therefore, keeping an eye on these debts and considering early repayments when your income increases can be beneficial.


Support for Education and Employment

The budget includes $30.2 million over five years for partnerships aimed at empowering First Nations people with education and employment opportunities. Additionally, $76 million has been allocated to help First Nations people transition from prison to the workforce. These initiatives are crucial for economic empowerment and community development.


Addressing Domestic Violence

A significant portion of the budget, $925.2 million over five years, is allocated to the Leaving Violence Program. This 12-week program aims to provide support and resources to those affected by domestic violence. While the figures are promising, the effectiveness of these programs remains to be seen.

Australia ranks eighth in the world for violence against women, with one in six Australian women experiencing domestic violence. The government needs to implement serious measures and invest in programs that address the root causes of this issue, including preventive measures for men.


Rental Assistance and Housing

The budget promises a 10% increase in rental assistance for Centrelink recipients over five years. However, with rents increasing by 8.6% in just the past year, this measure may barely keep up with rising costs. This is particularly concerning for older Australians and those who are likely to rent for the rest of their lives.


Parental Leave and Superannuation

A positive change in the budget is the inclusion of superannuation payments on government parental leave. This measure aims to reduce the super gap between men and women, ensuring women don’t miss out on retirement savings during maternity leave. On a $70,000 wage, this could add an extra $2,907.70 to your super.

Let’s hope these measures bring some positive impact and support to those who need it most.


So, while the budget might not solve all our problems, do make sure you take advantage of the energy rebate, check out your access too paid parental leave and if you are in a domestic violence situation we have a list of resources you can use NOW!